US Airways 2009 Annual Report Download - page 111

Table of Contents
The per share fair value of the pilot stock options and assumptions used for the January 31, 2008 and 2007 grants were as follows:
January 31, January 31,
2008 2007
Per share fair value $ 3.02 $ 18.02
Risk free interest rate 2.2% 4.9%
Expected dividend yield — —
Expected life 2.0 years 2.0 years
Volatility 55% 53%
As of December 31, 2009, there were no unrecognized compensation costs related to stock options granted to pilots as the stock
options were fully vested on the grant date. As of December 31, 2009, there were 0.8 million pilot stock options outstanding at a
weighted average exercise price of $34.40 and a weighted average remaining contractual term of 7.28 years. No pilot stock options were
exercised in 2009 or 2008. There were 25,029 pilot stock options exercised during 2007 pursuant to this agreement. The total intrinsic
value of pilot stock options exercised during 2007 was $1 million. Cash received from pilot stock options exercised during 2007 totaled
$1 million.
16. Valuation and Qualifying Accounts (in millions)
Balance at Balance at
Beginning End
Description of Period Additions Deductions of Period
Allowance for doubtful receivables:
Year ended December 31, 2009 $ 6 $ 7 $ 5 $ 8
Year ended December 31, 2008 $ 4 $ 10 $ 8 $ 6
Year ended December 31, 2007 $ 8 $ 9 $ 13 $ 4
Allowance for inventory obsolescence:
Year ended December 31, 2009 $ 51 $ 19 $ 7 $ 63
Year ended December 31, 2008 $ 40 $ 21 $ 10 $ 51
Year ended December 31, 2007 $ 30 $ 12 $ 2 $ 40
Valuation allowance on deferred tax asset, net:
Year ended December 31, 2009 $ 646 $ — $ 23 $ 623
Year ended December 31, 2008 $ 71 $ 575 $ — $ 646
Year ended December 31, 2007 $ 256 $ — $ 185 $ 71
17. Flight 1549
On January 15, 2009, US Airways flight 1549 was involved in an accident in New York that resulted in the aircraft ditching in the
Hudson River. The Airbus A320 aircraft was en route to Charlotte from LaGuardia with 150 passengers and a crew of five onboard. All
aboard survived and there were no serious injuries. US Airways had insurance coverage for both the aircraft (which was a total loss) as
well as costs resulting from the accident, and there were no applicable deductibles.
The aircraft involved in the flight 1549 accident was leased by US Airways. In the first quarter of 2009, US Airways exercised its
aircraft substitution right under the lease agreement and transferred title of an owned Airbus A320 to the lessor in substitution for the
Airbus A320 aircraft that was involved in the accident. This transferred aircraft will continue to be leased to US Airways under the same
terms and conditions of the lease agreement. In connection with this transaction, US Airways extinguished $22 million of debt associated
with the previously owned aircraft that was transferred to the lessor.
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